In the abridged version of his Lived It Lecture from the Entrepreneurship 101 series, Mike McDerment, CEO and co-founder of FreshBooks Cloud Accounting, highlights the steps required to answer an important question in any kind of business: “Who are you as an enterprise?”

All entrepreneurs should know the answer to this question and use it as a guideline for the way they run their businesses.

Check out the Quick Hits video of Mike’s Lived it Lecture:

In the video, Mike’s advice prompts three questions that entrepreneurs should ask themselves.

1. Where does your value come from?
According to Mike, all businesses are either crayons (visionaries for a brighter future) or Aspirin (remedies to everyday problems). One is not better than the other, but knowing which type of business you are is crucial to your success. It will allow you to focus your marketing strategy and effectively communicate where your value comes from.

2. Who can add to your value?
Mike didn’t like doing reports, but thought that he had to. He didn’t, so Levi Cooperman, FreshBooks’ vice-president of operations, took over because he was good at them. They complement each other that way, and Mike has hired other people who complement him in other ways. A business is like a puzzle: each piece has to fit with the other to make the big picture, so make sure you have the right pieces.

3. Are your values being valued?
In the video, Mike says skills should only make up half of what you hire for. It’s also important to find people who match your work ethic and support the culture you’ve built. Stick to your values and find people who will uphold them as your business grows.

If you’ve answered these three questions, you should be able to answer the big one: Who are you as an enterprise?

View Mike McDerment’s full-length lecture here.

More recent wisdom
When he gave his lecture, Mike said he didn’t know where he would be in two years. It’s been almost two years now, and he’s still going strong with FreshBooks. I recently had the opportunity to talk to him and to get some more of his thoughts on the topics above.

More on values
When asked about the most important value in business, Mike stresses shared values between yourself and your team over a single principle. When pressed to choose a single most important value, he says he’d pick honesty. Mike says that being straightforward and direct fosters trust and leads to clarity and efficiency, a recipe for a winning team.

One more question
Add this question from Mike to your homework assignment: “How can you do it better?”

There’s always room for improvement, says Mike, and continuing innovation gives you opportunities to learn from your mistakes. If you really nailed it the first time, he adds, you can probably relax—not for too long, though, because being satisfied will get you in trouble. The key to success is never settling for good enough.

One last word of advice
Before he was a successful CEO, Mike was an entrepreneur just like our clients. Here’s some advice he wishes he’d heard back then: “Every problem is a people problem, every solution is a people solution.”

As Mike says, “businesses are collections of people, after all.”

Laura Scutaru

Laura recently graduated from the University of Toronto with a BA in English and Book & Media Studies. A former intern on the MaRS Business Services team, she enjoys reading, writing, and getting involved with arts and pop culture in her spare time. See more…